This ALGN stock forecast article was written by Isaac Rothstein – Analyst at I Know First.

Summary

• Align Technology’s stock has over doubled since the Coronavirus Pandemic
• Invisalign demand will continue to increase drastically
• The Coronavirus has slowed Invisalign sales but they should rebound quickly
• I Know First has a bullish 1-year forecast for ALGN

Align Technology Overview

Align Technology is a healthcare company that specializes in the realignment of teeth. They have two premier products: Invisalign and iTero. Invisalign is a clear teeth realigner that is a replacement of the traditional metal braces. Many orthodontists are now recommending Invisalign due to its effectiveness and aesthetic look in comparison to clunky traditional braces.

Their newer product, iTero, is a scanner that allows orthodontists and their patients better understand what is happening to the alignment of their teeth and how Invisalign can fix it. This scanner can track a patient’s teeth movement overtime to ensure better results. iTero takes just 60 seconds for a patient to scan their mouth and be able to fully see the movement of their teeth over time. This allows them to take the necessary steps to align their teeth the way they would like.

The combination of these two products drive Align Technology to be the best in their industry. Unlike other companies in the industry, such as ClearCorrect and SmileDirectClub, Align has the technology to track teeth movement over a period of time and adjust the patients alignment based on movement. In addition, Align Technology has many dentists and orthodontists on staff so that they can further assist each orthodontist while analyzing a clients teeth alignment.

Performance

Since the beginning of the Coronavirus, Align Technologies has been able to rally past its previous yearly high. ALGN stock is up over 100% since March 19th, 2020 (Yahoo Finance). In addition to performing well recently, ALGN has consistently outperformed competitors such as ILMN, ISRG, and BSX over the last 5 years.

Increased Invisalign Demand

Invisalign, a clear teeth aligner, is the biggest source of revenue for ALGN. The projected demand is expected to skyrocket in upcoming years. Due to how relatively new this product is, many people decide to wear braces on their teeth, but this is beginning to change in Invisalign’s favor. The clear aligners market is projected to exponentially grow over the next 7 years. This should drastically increase ALGN’s revenue.

In addition to relying on only Invisalign for revenue – up until the Coronavirus – ALGN’s iTero had also begun to generate a consistently growing amount of revenue for Align Technology. iTero is a scanner used by orthodontists on their clients so that they can tell show them what their teeth look like and are able to correctly fix them using Invisalign. This gives Align Technologies income from multiple streams rather than relying on just Invisalign.

Coronavirus Complications

Before the Coronavirus pandemic, ALGN had year over year growth in every quarter over the last five years. This growth has now slowed down since the beginning of the pandemic.

Since the beginning of Coronavirus, many people are either unable to go to the orthodontist or are deciding not to. Although this is hurting Align Technology’s revenue short term, it should not have a lasting effect on the company. Once the pandemic gets under control, people who once wanted to get their teeth fixed will still go. Due to this, I believe ALGN’s revenue will begin to constantly grow once people are comfortable going to the doctor again.

Post-Pandemic Breakout

Once normalcy begins to come back, Invisalign will have higher demand than ever before. The combination of being the leaders in a growing market in addition to many people delaying their purchase will increase ALGN’s revenue drastically.

As of June 21, 2020, Align Technologies stock forecast is showing an ultra-bullish 1-year score of 473.69 with a predictability score of 0.74. A high signal score of 473.69 indicates that we expect further positive returns for ALGN. The predictability score ranges from -1 to 1 to demonstrate how our prediction correlates with the actual stock’s movements. ALGN’s 0.74 is extremely high and shows that this stock has a relatively high level of predictability. Barring anything out of the ordinary, we expect ALGN to continue its tremendous bull run through 2020 and into 2021.

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Past Success with ALGN Stock Forecast

On May 31^st, 2020, the I Know First algorithm resulted in a bullish 1-month ALGN stock forecast. At the time of the forecast, Align Technologies’ stock price was $245.62. Just one month later ALGN stock had a value of $274.44, growing by 11.73%. The algorithm was successfully able to predict the jump ALGN made in June 2020.

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